State Action on Appeal: Parker Immunity and the
Collateral Order Doctrine in Antitrust Litigation
Jason Kornmehl ∗
ABSTRACT
The collateral order doctrine is perhaps the most significant exception to the general rule that only final judgments are appealable. The doctrine is particularly important in antitrust litigation when a defendant asserts state action immunity, often referred to as Parker immunity. However, the circuit courts have struggled with the question of whether a denial of Parker immunity is immediately appealable as a collateral order.
This unsettled procedural issue is further complicated by the fact that the
substantive law on Parker immunity differs depending on the entity asserting state action.
This Article argues that a governmental entity that is deemed part
of a state should be able to use the interlocutory appeal process to obtain
review of an order denying Parker immunity. On the other hand, government defendants deemed not part of the state, as well as private entities, should not be able to immediately appeal an adverse state action
determination under the collateral order doctrine. In addition, this Article
explores the collateral order doctrine’s applicability in FTC adjudicatory
proceedings. Cases such as North Carolina State Board of Dental Examiners v. FTC and FTC v. Phoebe Putney Health System, Inc. demonstrate
the Supreme Court’s renewed interest in the scope of state action immunity. However, the question of whether a denial of Parker immunity is
immediately appealable under the collateral order doctrine is also an important issue and is addressed in this Article.
∗ Law Clerk, Maryland Court of Appeals. The author was previously an attorney in the Antitrust
Bureau of the New York State Attorney General’s Office. Any and all opinions as well as conclusions expressed herein are those of the individual author and do not necessarily represent the opinions of the New York State Attorney General’s Office, the Antitrust Bureau, or any person other
than the author. 1
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CONTENTS
INTRODUCTION ......................................................................................... 2
I. OVERVIEW OF THE STATE ACTION DOCTRINE ...................................... 6
II. THE FINAL JUDGMENT RULE AND COLLATERAL ORDER DOCTRINE ... 9
III. GOVERNMENTAL ENTITIES DEEMED PART OF THE STATE ............... 12
A. Unreviewability .............................................................................. 13
1. State Sovereignty and Federalism as Evidence of Immunity...... 15
2. Challenges to Characterizing the State Action Doctrine as
Something Other than an Immunity ................................................ 18
B. Separability .................................................................................... 20
C. Conclusiveness ............................................................................... 22
D. Preserving Judicial Economy ........................................................ 23
IV. DEFENDANTS NEEDING TO SATISFY ONE OR BOTH OF THE MIDCAL
PRONGS ................................................................................................... 24
A. Governmental Entities Not Deemed Part of the State .................... 24
1. Unreviewability .......................................................................... 25
2. Separability ................................................................................. 27
B. Private Parties ................................................................................ 27
V. PARKER IMMUNITY AND THE COLLATERAL ORDER DOCTRINE IN
APPEALS FROM FTC ADMINISTRATIVE PROCEEDINGS........................... 28
CONCLUSION ........................................................................................... 31
INTRODUCTION
The state action doctrine1 immunizes certain conduct that is the intentional or foreseeable result of state or local government policy from
the federal antitrust laws.2 Although it may seem obscure,3 the state ac 1. It merits brief comment that this Article only discusses the antitrust state action doctrine.
The concept of state action in the Fourteenth Amendment’s Equal Protection Clause is different from
and much broader than the antitrust state action doctrine. See PHILLIP E. AREEDA & HERBERT
HOVENKAMP, ANTITRUST LAW ¶ 221a, at 47 (4th ed. 2013) (emphasizing that “conclusions of ‘state
action’ in the Fourteenth Amendment context should never be used to support a finding of ‘state
action’ in the antitrust context”); see also Herbert Hovenkamp, Federalism and Antitrust Reform, 40
U.S.F. L. REV. 627, 628 n.15 (2006) (asserting that the antitrust state action doctrine and Fourteenth
Amendment state action doctrine “are rarely confused”).
2. 1 ABA SECTION OF ANTITRUST LAW, ANTITRUST LAW DEVELOPMENTS 1271 (7th ed. 2012)
[hereinafter ANTITRUST LAW DEVELOPMENTS].
3. Indeed, at one point in time the state action doctrine was a minor part of U.S. antitrust law.
See Richard Quaresima, Comment, Antitrust Law—State Action Doctrine—State Agencies Exempt
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State Action on Appeal: Parker Immunity
3
tion doctrine is a critical part of antitrust law.4 The doctrine is important
because it implicates two key constitutional principles—federalism and
state sovereignty.5 In addition, the doctrine has a significant impact when
state or local governments adopt economic or social policies that conflict
with open competition.6
After remaining largely dormant, the state action doctrine has seen
a resurgence in recent years.7 For example, in 2013, the United States
Supreme Court ruled on the applicability of the state action doctrine to a
hospital merger in FTC v. Phoebe Putney Health System, Inc.8 It was the
first time in twenty years that the Supreme Court heard a case on the
state action doctrine.9 In 2015, the Supreme Court decided North Carolina State Board of Dental Examiners v. FTC,10 another prominent case
involving the state action doctrine.11 Despite an extended period during
from the Active Supervision Prong of the Midcal Test. Hass v. Oregon State Bar, 883 F.2d 1453 (9th
Cir.1989), Cert. Denied, 110 S. Ct. 1812 (1990), 22 RUTGERS L.J. 525, 529 (1991) (highlighting that
the “state action doctrine languished in relative obscurity for the first thirty years of its existence”).
In fact, only one Supreme Court case in over three decades directly discussed the state action doctrine since it was first articulated in 1943. See Schwegmann Bros. v. Calvert Distillers Corp., 341
U.S. 384, 389, reh’g denied, 341 U.S. 956 (1951) (addressing state action issues in dicta).
4. See John E. Lopatka & William H. Page, State Action and the Meaning of Agreement Under
the Sherman Act: An Approach to Hybrid Restraints, 20 YALE J. ON REG. 269, 272 (2003) (stating
that many “scholars have labored over the nuances of state action immunity”).
5. See City of Columbia v. Omni Outdoor Adver., Inc., 499 U.S. 365, 370 (1991) (asserting the
state action doctrine relies on “principles of federalism and state sovereignty”).
6. See, e.g., New Motor Vehicle Bd. of Cal. v. Orrin W. Fox Co., 439 U.S. 96, 111 (1978)
(enforcement of state statute allowing existing auto dealers to obstruct new dealerships within their
markets protected under state action doctrine); Kay Elec. Coop. v. City of Newkirk, 647 F.3d 1039,
1041 (10th Cir. 2011) (municipality’s tying of electric and sewer services not protected under the
state action doctrine).
7. See ABA SECTION OF ANTITRUST LAW, STATE ACTION PRACTICE MANUAL 5 (2d ed. 2010)
[hereinafter STATE ACTION PRACTICE MANUAL] (noting that the doctrine is “a significant component of recent jurisprudence regarding the appropriate balance of power between both state and
national governments and the judicial and legislative branches”); The Patient Protection and Affordable Care Act and the Consequent Impact on Competition in Healthcare: Hearing Before the H.
Comm. on the Judiciary, 113th Cong. 10 (2013) (statement of Professor Thomas L. Greaney), available at http://judiciary.house.gov/_files/hearings/113th/09192013_2/Greaney%20Testimony.pdf
(proclaiming that the doctrine is currently “[a]mong the important issues on the antitrust agenda”).
8. FTC v. Phoebe Putney Health Sys., Inc., 133 S. Ct. 1003, 1007 (2013).
9. The last time the Court decided a state action case was in 1992. See FTC v. Ticor Title Ins.
Co., 504 U.S. 621, 625 (1992).
10. See N.C. State Bd. of Dental Exam’rs v. FTC, 135 S. Ct. 1101 (2015).
11. See Shepard Goldfein & James Keyte, Court Demands State Oversight Over Agencies for
Antitrust Immunity, N.Y. L.J., Mar. 12, 2015, at 1, available at https://www.skadden.com/sites/
default/files/publications/070031520Skadden.pdf (stating, “As a result of the court’s opinion [in
North Carolina State Board of Dental Examiners], many industries . . . may have to rethink their
professional regulatory regimes currently in place nationwide.”); Jacob Gershman, Cases on Securities Fraud, Teeth-Whitening, Prisoner Beards Enter Supreme Court’s Docket, WALL ST. J. L. BLOG
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which few state action cases were heard by the Supreme Court, the occasions for considering the state action doctrine in antitrust litigation “are
numerous and diverse.”12 Accordingly, the Federal Trade Commission
(FTC) has recently increased enforcement actions involving the state action doctrine.13 Although many Supreme Court decisions have defined
the meaning and limits of the state action doctrine,14 these decisions have
left “a great deal of confusion about the source and the scope” of the doctrine.15
One area of confusion regarding the scope of the state action doctrine is whether an order denying a motion to dismiss an antitrust claim
under the doctrine is immediately appealable as a collateral order.16 Federal courts of appeals have grappled with this issue in a variety of ways,
and a circuit split has emerged. The Fourth17 and Sixth18 Circuits held
that a ruling denying a motion to dismiss an antitrust claim under the
state action doctrine is not immediately appealable as a collateral order.
On the other hand, the Fifth19 and Eleventh20 Circuits held that such a
ruling is immediately appealable as a collateral order. However, the Fifth
Circuit held that only governmental defendants asserting the state action
(Mar. 3, 2014, 12:40 PM), http://blogs.wsj.com/law/2014/03/03/cases-on-securities-fraud-teethwhitening-prisoner-beards-enter-supreme-courts-docket/.
12. AREEDA & HOVENKAMP, supra note 1, ¶ 221a, at 47.
13. See J. Thomas Rosch, Commissioner, Fed. Trade Comm’n, Returning the State Action
Doctrine to Its Moorings (Oct. 3, 2012), available at http://www.ftc.gov/sites/default/files/
documents/public_statements/returning-state-action-doctrine-its-moorings/121003stateaction.pdf
(revealing that “the FTC has sought to clarify the state action doctrine by bringing administrative
and federal court cases [and] filing amicus briefs”).
14. See STATE ACTION PRACTICE MANUAL, supra note 7, at 9–14, 15 (examining the “flurry of
Supreme Court cases in the mid- to late 1970s” on the state action doctrine and observing that the
“abundance of state action cases in the 1970s demonstrated the importance of the doctrine”); Steven
Semeraro, Demystifying Antitrust State Action Doctrine, 24 HARV. J.L. & PUB. POL’Y 203, 210
(2000) (noting that “the Court decided more than a dozen antitrust state action cases” from the mid1970s through the early 1990s).
15. David McGowan & Mark A. Lemley, Antitrust Immunity: State Action and Federalism,
Petitioning and the First Amendment, 17 HARV. J.L. & PUB. POL’Y 293, 293 (1994); see STATE
ACTION PRACTICE MANUAL, supra note 7, at 109 (stating that the “doctrine has presented a number
of recurring policy issues since its creation”); see also FTC OFFICE OF POLICY PLANNING, REPORT
OF THE STATE ACTION TASK FORCE 57 (2003), available at http://www.ftc.gov/os/2003/09/state
actionreport.pdf (recognizing that “Supreme Court case law has left open many important questions
regarding the scope of the state action doctrine”).
16. See AREEDA & HOVENKAMP, supra note 1, ¶ 228e, at 245–46; STATE ACTION PRACTICE
MANUAL, supra note 7, at 156–60.
17. S.C. State Bd. of Dentistry v. FTC, 455 F.3d 436, 442 (4th Cir. 2006).
18. Huron Valley Hosp., Inc. v. City of Pontiac, 792 F.2d 563, 568 (6th Cir. 1986).
19. Martin v. Mem’l Hosp., 86 F.3d 1391, 1397 (5th Cir. 1996).
20. Commuter Transp. Sys., Inc. v. Hillsborough Cnty. Aviation Auth., 801 F.2d 1286, 1290
(11th Cir. 1986).
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doctrine can take advantage of an immediate appeal and that private defendants cannot immediately appeal an order denying a motion to dismiss under the state action doctrine.21 Likewise, the Tenth Circuit, in the
most recent decision on the issue of interlocutory appeals of state action
rulings, held that a private defendant is not entitled to an immediate appeal of a trial court order on the state action doctrine.22 The Third23 and
Seventh24 Circuits have also contributed to this circuit split, albeit in dicta, suggesting that the denial of a governmental defendant’s state action
immunity is subject to immediate appeal. The fact that seven of the thirteen federal courts of appeals have addressed the immediate appealability
of an order denying a motion to dismiss under the state action doctrine
demonstrates the significance and complexity of this procedural issue in
antitrust litigation.25
This Article attempts to resolve the question of immediate
appealability by applying the Supreme Court’s test for the availability of
interlocutory appeals to orders denying a motion to dismiss under the
state action doctrine. This Article asserts that a governmental entity that
is deemed part of a state should be able to use the interlocutory appeal
process to obtain review of an order denying a motion to dismiss under
the state action doctrine. However, governmental defendants deemed not
part of the state itself and private entities should not be able to immediately appeal an adverse state action determination under the collateral
order doctrine.
Part I of this Article provides a historical overview of the state action doctrine and presents background information on how the doctrine is
21. Acoustic Sys., Inc. v. Wenger Corp., 207 F.3d 287, 292 (5th Cir. 2000). In contrast, the
Eleventh Circuit has held that private defendants may immediately appeal an order denying a motion
to dismiss under the state action doctrine. See Praxair, Inc. v. Fla. Power & Light Co., 64 F.3d 609,
611 (11th Cir. 1995).
22. Auraria Student Hous. at the Regency, LLC v. Campus Vill. Apartments, LLC, 703 F.3d
1147, 1153 (10th Cir. 2013). The Tenth Circuit felt it “unnecessary to weigh in on the circuit split”
on whether governmental defendants could immediately appeal an order denying a motion to dismiss
under the state action doctrine and only ruled on whether private defendants could immediately
appeal. Id. at 1151.
23. We, Inc. v. City of Philadelphia, 174 F.3d 322, 329 (3d Cir. 1999) (holding denial of
Noerr–Pennington immunity not immediately appealable under the collateral order doctrine).
24. Segni v. Commercial Office of Spain, 816 F.2d 344, 346 (7th Cir. 1987) (ruling private
defendant was not entitled to an immediate appeal from a denial of a defense based on the First
Amendment’s Petition Clause, but that an order denying foreign government immunity under Foreign Sovereign Immunities Act was immediately appealable as a collateral order).
25. The Supreme Court has recently recognized the importance of procedural issues in antitrust
actions. See Gelboim v. Bank of America Corp., 135 S. Ct. 897, 903–04 (2015) (considering whether
bondholder plaintiffs accusing several banks of violating antitrust law by rigging the London InterBank Offered Rate (LIBOR) had the right to immediately appeal the dismissal of their case even
though broader multidistrict litigation was still ongoing).
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applied to different entities. Part II outlines the requirements for appellate jurisdiction, discussing both the final judgment rule and the collateral order doctrine. Part III explains the Article’s finding that those governmental defendants that are deemed part of the state are entitled to an
immediate appeal. Next, Part IV examines the immediate appealability of
rulings on the state action doctrine when the defendant is a governmental
entity not part of the state itself or a private party, and analyzes why these defendants should not be entitled to an immediate appeal. Finally, Part
V explores the immediate appealability of state action orders in the context of FTC adjudicative proceedings.
I. OVERVIEW OF THE STATE ACTION DOCTRINE
The federal antitrust laws have been described as the “Magna Carta
of free enterprise.”26 As a result, the Supreme Court has asserted that these laws “are as important to the preservation of economic freedom and
our free-enterprise system as the Bill of Rights is to the protection of our
fundamental personal freedoms.”27 Although the federal antitrust laws
are integral to competition and free enterprise, Congress has adopted
many exemptions. For example, the McCarran-Ferguson Act affords insurers an exemption from the federal antitrust laws,28 the NorrisLaGuardia Act immunizes certain activities involving organized labor
from the federal antitrust laws,29 and the Shipping Act of 1984 exempts
from antitrust liability any agreement between ocean common carriers
that is filed with the Federal Maritime Commission.30 In the absence of a
specific statutory exemption, federal courts have developed exemptions
and immunities to federal antitrust laws as well. One such “judicially
created exemption” is the state action doctrine.31
The state action doctrine was first recognized in 1943 when the Supreme Court decided Parker v. Brown.32 As a result, the state action doc 26. United States v. Topco Assocs., 405 U.S. 596, 610 (1972).
27. Id.
28. 15 U.S.C. §§ 1011–1015 (West, Westlaw through P.L. 114-40).
29. 29 U.S.C. §§ 101–110, 113–115 (West, Westlaw through P.L. 114-40).
30. 46 U.S.C. § 40307(a)(1)–(2) (West, Westlaw through P.L. 114-25).
31. Darren Bush, Mission Creep: Antitrust Exemptions and Immunities as Applied to Deregulated Industries, 2006 UTAH L. REV. 761, 770 (2006); Thomas M. Jorde, Antitrust and the New State
Action Doctrine: A Return to Deferential Economic Federalism, 75 CALIF. L. REV. 227, 256 (1987).
32. Parker v. Brown, 317 U.S. 341 (1943). However, it is important to note that the state action
doctrine’s genesis can be traced to several prior decisions, some of which the Court cited to in Parker. See, e.g., N. Sec. Co. v. United States, 193 U.S. 197, 344–47 (1904) (rejecting claim that mere
state authorization immunized a merger); Olsen v. Smith, 195 U.S. 332, 344–45 (1904) (finding the
Sherman Act inapplicable to a claim that a state governor was restraining trade by refusing to grant a
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State Action on Appeal: Parker Immunity
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trine is also known as Parker immunity.33 In Parker, a California state
statute, the Agricultural Prorate Act, authorized state officials to establish
marketing programs for agricultural commodities produced in the state.34
The express purpose of the program was to restrict competition among
growers of those commodities.35 In that case, the plaintiff, Porter I.
Brown, produced, purchased, and packed raisins.36 Brown challenged the
validity of California’s Agricultural Prorate Act as a violation of the
Sherman Antitrust Act,37 and sued the California Director of Agriculture,
W.B. Parker, who helped administer the marketing program.38 A
three-judge district court panel permanently enjoined California’s program.39 However, the Supreme Court reversed the injunction.40
The Court in Parker upheld the California program regulating the
marketing of raisins as an “act of government which the Sherman Act did
not undertake to prohibit.”41 In its unanimous decision, the Court primarily relied on legislative intent to conclude that California’s raisin marketing program was valid under the Sherman Act.42 Based on the Sherman
Act’s legislative history, the Court determined that Congress did not intend to restrain state action.43 The Court noted that “an unexpressed purpose to nullify a state’s control over its officers and agents is not lightly
to be attributed to Congress.”44 Accordingly, the Court interpreted the
Sherman Act as “a prohibition of individual and not state action.”45
pilot’s license); Lowenstein v. Evans, 69 F. 908, 911 (C.C.D.S.C. 1895) (upholding South Carolina
statute creating a state liquor monopoly).
33. ANTITRUST LAW DEVELOPMENTS, supra note 2, at 1271; see also City of Lafayette v. La.
Power & Light Co., 435 U.S. 389, 415 (1978) (referring to the state action doctrine as “Parker immunity”). This Article will use the terms “state action doctrine” and “Parker immunity” interchangeably. As discussed in more detail later in this Article, the state action doctrine, as applied to
governmental entities deemed part of the state, is in fact an immunity and the term “Parker immunity” is not a misnomer. See infra Part III.A.
34. Parker, 317 U.S. at 346.
35. Id.
36. Id. at 344.
37. Id. at 348–49.
38. Id. at 344.
39. Id.
40. Id. at 368.
41. Id. at 352 (citing Olsen v. Smith, 195 U.S. 332, 344–45 (1904) and comparing Lowenstein
v. Evans, 69 F. 908, 910 (C.C.D.S.C. 1895)).
42. STATE ACTION PRACTICE MANUAL, supra note 7, at 43 (stating that “the Parker Court
largely focused on legislative intent”).
43. Parker, 317 U.S. at 350–51 (finding “nothing in the language of the Sherman Act or in its
history which suggests that its purpose was to restrain a state or its officers or agents from activities
directed by its legislature”).
44. Id. at 351.
45. Id. at 352.
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The Parker decision left open the issue of whether the conduct of
private actors and subordinate government entities could be exempt from
federal antitrust laws based on the state action doctrine.46 However, in a
series of cases in the 1980s, the Supreme Court found that private actors
and certain subordinate government entities could rely on the state action
doctrine to shield their conduct from federal antitrust scrutiny. In California Retail Liquor Dealers Ass’n v. Midcal Aluminum, the Court established a two-part test for determining whether private actors could take
advantage of Parker immunity.47 The unanimous Court stated that (1) the
challenged restraint must be “one clearly articulated and affirmatively
expressed as state policy[,]” and (2) “the policy must be ‘actively supervised’ by the State itself.”48 Because actions of a state legislature and a
state’s highest court acting in a legislative capacity are treated as the action of a state itself, the state action doctrine applies to these entities
without a need to establish the clear articulation and active supervision
requirements of Midcal.49
Midcal’s two-part test has long supplied the framework within
which courts have determined the availability of the state action defense
to private parties.50 However, actions taken by subordinate government
entities such as counties and municipalities may also be entitled to Parker immunity. Subordinate government entities are not entitled to the
46. See id. (clarifying that “no question of the state or its municipality becoming a participant
in a private agreement or combination by others for restraint of trade” was presented).
47. Cal. Retail Liquor Dealers Ass’n v. Midcal Aluminum, Inc., 445 U.S. 97, 105 (1980).
48. Id. (internal citation omitted).
49. Hoover v. Ronwin, 466 U.S. 558, 568–69 (1984) (“Where the conduct at issue is in fact
that of the state legislature or supreme court, we need not address the issues of ‘clear articulation’
and ‘active supervision.’”). There is a paucity of case law on whether actions of the governor are
treated as actions of the state itself and thus need not meet Midcal’s two prongs. See id. at 568 n.17
(noting that its ruling did not address “whether the Governor of a State stands in the same position as
the state legislature and supreme court for purposes of the state-action doctrine”). However, many
antitrust scholars believe that courts should treat the actions of a governor as actions of the state
itself. See PHILLIP E. AREEDA & HERBERT HOVENKAMP, ANTITRUST LAW: AN ANALYSIS OF
ANTITRUST PRINCIPLES AND THEIR APPLICATION ¶ 224b, at 405 (2d ed. 2000); JOHN E. LOPATKA &
WILLIAM H. PAGE, NARROWING THE SCOPE OF THE STATE ACTION DOCTRINE: REPORT PREPARED
FOR THE FEDERAL TRADE COMMISSION 32–33 (2001); C. Douglas Floyd, Plain Ambiguities in the
Clear Articulation Requirement for State Action Antitrust Immunity: The Case of State Agencies, 41
B.C. L. REV. 1059, 1081–83 (2000) (arguing that all public authorities that have the power to formulate a general policy in favor of the anticompetitive arrangements for the state as a whole need not
meet both Midcal prongs).
50. See Daniel J. Gifford, The Antitrust State-Action Doctrine After Fisher v. Berkeley, 39
VAND. L. REV. 1257, 1266–67 (1986) (stating that “[a]lthough the clear articulation and supervision
standards were drawn from the Court’s prior state-action decisions, only in Midcal did they attain the
status of sine qua nons for application of the state-action defense” and that “Midcal has remained a
significant precedent because its standards have continued, at least formally, to govern the application of the state-action doctrine”).
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State Action on Appeal: Parker Immunity
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same protection from the federal antitrust laws as a state itself, and thus
also fall under the Midcal framework.51 However, municipalities and
local government entities need only satisfy Midcal’s first prong for their
conduct to be exempt from federal antitrust laws under the state action
doctrine.52
The state action doctrine is a strong weapon, or perhaps more appropriately, a shield, in the arsenal of antitrust defendants.53 Because the
state action doctrine “derive[s] from principles of federalism and other
constitutional considerations,”54 and is a long-term priority of the Federal
Trade Commission,55 it is an important exemption that governmental and
private entities will continue to invoke in antitrust litigation.
II. THE FINAL JUDGMENT RULE AND COLLATERAL ORDER DOCTRINE
Generally, federal courts of appeals only have jurisdiction to review
“final decisions” of the federal district courts.56 This is known as the “final judgment rule.”57 The final judgment rule is codified in 28 U.S.C.
§ 1291 and provides that “the courts of appeals . . . shall have jurisdiction
of appeals from all final decisions of the district courts of the United
States.”58 Thus, the requirement that there be a “final decision” serves as
51. See City of Lafayette v. La. Power & Light Co., 435 U.S. 389, 412 (1978) (finding that
“[c]ities are not themselves sovereign; they do not receive all the federal deference of the States that
create them”); Cmty. Commc’ns Co. v. City of Boulder, 455 U.S. 40, 55 (1982) (narrowly construing the meaning of Midcal’s first prong as applied to a municipality acting under a home rule statute).
52. Town of Hallie v. City of Eau Claire, 471 U.S. 34, 47 (1985) (“Once it is clear that state
authorization exists, there is no need to require the State to supervise actively the municipality’s
execution of what is a properly delegated function.”). It is unclear whether state executive departments and agencies are part of the state itself or are considered subordinate government entities that
must satisfy Midcal’s first prong. ANTITRUST LAW DEVELOPMENTS, supra note 2, at 1279.
53. See Elizabeth Trujillo, State Action Antitrust Exemption Collides with Deregulation: Rehabilitating the Foreseeability Doctrine, 11 FORDHAM J. CORP. & FIN. L. 349, 352 (2006) (describing
the state action doctrine as a “particularly useful tool for potential antitrust defendants”).
54. ANTITRUST LAW DEVELOPMENTS, supra note 2, at 1271.
55. Jon Leibowitz, Chairman, Fed. Trade Comm’n, Remarks as Prepared for Delivery at the
Sixth Annual Georgetown Law Global Antitrust Enforcement Symposium (Sept. 19, 2012), available at 2012 WL 4339298 (asserting that the state action doctrine is an “example of the [Federal
Trade] Commission’s long-term priorities”).
56. 28 U.S.C. § 1291 (West, Westlaw current through P.L. 114-40).
57. See JACK H. FRIEDENTHAL, MARY KAY KANE & ARTHUR R. MILLER, CIVIL PROCEDURE
600 (3d ed. 1999) (stating “the question of when an appeal can be taken is governed by the so-called
‘final judgment rule’”). See generally Carleton M. Crick, The Final Judgment as a Basis for Appeal,
41 YALE L.J. 539 (1932) (tracing the roots of the final judgment rule to English writ of error practice
where the King’s Bench corrected errors of the other common law courts).
58. 28 U.S.C. § 1291 (West, Westlaw current through P.L. 114-40).
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a precondition to review by the federal appellate courts.59 The Supreme
Court has described a “final decision” as one that “ends the litigation on
the merits.”60 The most salient rationale underlying the final judgment
rule is a desire to achieve judicial economy and efficiency.61 The rule
protects the appellate courts from the “intolerable burden” of reviewing
countless pretrial orders and prevents parties from driving up costs by
appealing every order in an effort to avoid a decision on the merits.62
Nonetheless, there is an eclectic array of statutory63 and common
law64 exceptions to the final judgment rule. Perhaps the most important
exception to the final judgment rule is the collateral order doctrine,65
which was introduced by the Supreme Court in Cohen v. Beneficial In 59. Id. The Supreme Court encountered the concept of finality of judgments as early as 1848.
See Forgay v. Conrad, 47 U.S. (6 How.) 201 (1848).
60. Catlin v. United States, 324 U.S. 229, 233 (1945).
61. See Firestone Tire & Rubber Co. v. Risjord, 449 U.S. 368, 374 (1981) (stating that the final
judgment rule “serves the important purpose of promoting efficient judicial administration”); Note,
Appealability in the Federal Courts, 75 HARV. L. REV. 351, 351 (1961) (asserting “[t]he basic rationale of the finality rule is conservation of judicial resources” and constant interruption by interlocutory appeals “would consume trial court time, forestall the ultimate resolution of the case, and
facilitate the harassment of one party by his opponent”); infra Part III.D for an explanation of how
judicial economy is not undermined by allowing immediate appeals by governmental defendants
deemed part of the state. See generally Gary L. Davis & Joseph E. Reber, Cost of Appeal, 27 MONT.
L. REV. 49 (1965) (detailing costliness of appeals).
62. Lloyd C. Anderson, The Collateral Order Doctrine: A New “Serbonian Bog” and Four
Proposals for Reform, 46 DRAKE L. REV. 539, 542 (1998).
63. See, e.g., 28 U.S.C. § 1292(a)(1) (West, Westlaw through P.L. 114-49 (excluding P.L. 11441)) (allowing appeal of interlocutory orders “granting, continuing, modifying, refusing or dissolving injunctions”); 28 U.S.C. § 1292(a)(2) (permitting appeal of interlocutory orders involving the
appointment of receiverships); 28 U.S.C. § 1292(a)(3) (authorizing appeal of interlocutory orders
that determine “the rights and liabilities of the parties” in admiralty cases); 28 U.S.C. § 1292(b)
(providing that, despite the absence of a final judgment, a party may obtain interlocutory review of
“an order not otherwise appealable” with the consent of both the trial court and the court of appeals).
64. One judicially developed exception to the final judgment rule involves cases in which some
immediate harm might occur to the appellant if review is postponed. See Forgay, 47 U.S. (6 How.)
at 206 (allowing appeal on the ground that there would have been irreparable harm to the losing
party if review was delayed and the appellant was forced to comply with the trial judge’s decree).
65. See FRIEDENTHAL, KANE & MILLER, supra note 57, at 608 (stating that the collateral order
doctrine is the “most widely used” judicial exception to the final judgment rule); Aaron R. Petty, The
Hidden Harmony of Appellate Jurisdiction, 62 S.C. L. REV. 353, 387 (2010) (characterizing the
collateral order doctrine as “the most significant exception to the final judgment rule”); Michael E.
Solimine & Christine Oliver Hines, Deciding to Decide: Class Action Certification and Interlocutory Review by the United States Courts of Appeals under Rule 23(F), 41 WM. & MARY L. REV. 1531,
1548 (2000) (describing the collateral order doctrine as a “major qualification to the final judgment
rule”). However, the Supreme Court has avoided labeling the collateral order doctrine an “exception” to the final judgment rule. See Will v. Hallock, 546 U.S. 345, 349 (2006) (noting the collateral
order doctrine is “best understood not as an exception to the ‘final decision’ rule laid down by Congress in [28 U.S.C.] § 1291, but as a ‘practical construction’ of it”); see also GREGORY A.
CASTANIAS & ROBERT H. KLONOFF, FEDERAL APPELLATE PRACTICE AND PROCEDURE 82 (2008)
(explaining that an order under the collateral order doctrine “is a species of a final judgment”).
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dustrial Loan Corp. in 1949.66 In Cohen, a shareholder brought a derivative action in federal court against a corporation’s officers and directors
under the court’s diversity jurisdiction.67 The company moved for an order requiring the shareholder to post security for costs, as required under
a state statute.68 The district court denied the motion and the corporation
appealed to the Third Circuit, which ultimately concluded that the order
was appealable.69 The U.S. Supreme Court affirmed.70 In making its ruling, the Court held that the final judgment rule, as articulated in 28
U.S.C. § 1291, did not prevent immediate review of rulings that “finally
determine claims of right separable from, and collateral to, rights asserted in the action, too important to be denied review and too independent
of the cause itself to require that appellate consideration be deferred until
the whole case is adjudicated.”71 The Supreme Court later established a
three-pronged test for determining whether an order falls within this definition.72
Under the collateral order doctrine’s three-pronged test, an order
must “[1] conclusively determine the disputed question, [2] resolve an
important issue completely separate from the merits of the action, and [3]
be effectively unreviewable on appeal from a final judgment.”73 Each
condition—conclusiveness, separability, and unreviewability—must be
satisfied for the ruling to fall within the collateral order doctrine.74 The
Court has explicated that these three conditions are “stringent” because
otherwise, “the [collateral order] doctrine will overpower the substantial
finality interests [that 28 U.S.C.] § 1291 is meant to further.”75 In addition, the Court has emphasized that the class of orders satisfying this
“stringent” test should be understood as “small,” “modest,” and “narrow.”76
The Court has found that orders denying absolute immunity,77 qualified immunity,78 state sovereign immunity,79 and federal employees’
66. Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 545–47 (1949).
67. Id. at 543.
68. Id. at 544–45.
69. Id. at 545.
70. Id. at 545–47.
71. Id. at 546.
72. See Coopers & Lybrand v. Livesay, 437 U.S. 463, 468 (1978).
73. Id.
74. Gulfstream Aerospace Corp. v. Mayacamas Corp., 485 U.S. 271, 276 (1988).
75. Will v. Hallock, 546 U.S. 345, 349–50 (2006) (internal citations omitted).
76. Id. at 350 (internal citations omitted).
77. Nixon v. Fitzgerald, 457 U.S. 731, 742 (1982).
78. Mitchell v. Forsyth, 472 U.S. 511, 530 (1985).
79. P.R. Aqueduct & Sewer Auth. v. Metcalf & Eddy, Inc., 506 U.S. 139, 144–45 (1993).
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claims of immunity under the Westfall Act80 are immediately appealable
under the collateral order doctrine. The Court has also ruled that orders
adverse to a criminal defendant on the defense of double jeopardy fall
within the collateral order doctrine.81 Conversely, orders refusing to dismiss a case on forum non conveniens grounds,82 imposing discovery
sanctions,83 disqualifying counsel,84 and declining to enforce a contractual forum selection clause85 are not immediately appealable under the collateral order doctrine. Although the collateral order doctrine has been
criticized by jurists86 and commentators,87 it nonetheless remains the
“most important judicially-crafted exception to the final judgment rule”88
and is a fundamental part of appellate procedure.
III. GOVERNMENTAL ENTITIES DEEMED PART OF THE STATE
The division among federal appellate courts89 over the immediate
appealability of orders denying a motion to dismiss an antitrust claim
under the state action doctrine is particularly acute where governmental
entities are antitrust defendants.90 However, orders denying Parker immunity to governmental entities that are deemed part of the state itself,
such as certain state-level executive departments and administrative
agencies,91 likely fall within the “small class”92 of immediately appeala 80. Osborn v. Haley, 549 U.S. 225, 237–40 (2007).
81. Abney v. United States, 431 U.S. 651, 660 (1977).
82. Van Cauwenberghe v. Biard, 486 U.S. 517, 527–30 (1988).
83. Cunningham v. Hamilton Cnty., 527 U.S. 198, 208 (1999).
84. Richardson-Merrell, Inc. v. Koller, 472 U.S. 424, 424–25 (1985).
85. Lauro Lines S.R.L. v. Chasser, 490 U.S. 495, 496 (1989).
86. See, e.g., Sell v. United States, 539 U.S. 166, 189 n.4 (2003) (Scalia, J., dissenting) (contending that the Court “invented” the collateral order doctrine, for which “[t]he statutory text [of 28
U.S.C. § 1291] provides no basis”).
87. See, e.g., Anderson, supra note 62, at 540–41 (criticizing the Supreme Court’s collateral
order doctrine jurisprudence as confusing and causing an “explosion of purely procedural litigation
over what orders are appealable”); Timothy P. Glynn, Discontent and Indiscretion: Discretionary
Review of Interlocutory Orders, 77 NOTRE DAME L. REV. 175, 204–05 (2001) (claiming that the
collateral order doctrine “has had a troubled history” and is “the most maligned of the exceptions” to
the final judgment rule); Adam N. Steinman, Reinventing Appellate Jurisdiction, 48 B.C. L. REV.
1237, 1252–57 (2007) (discussing “three principal problems” with the collateral order doctrine).
88. Petty, supra note 65, at 377.
89. See supra text accompanying notes 15–25.
90. See Auraria Student Hous. at the Regency, LLC v. Campus Vill. Apartments, LLC, 703
F.3d 1147, 1151 (10th Cir. 2013) (explaining that the circuit split on the question of whether denial
of Parker immunity is immediately appealable by private parties “is much less pronounced” than the
circuit split on the question of whether denial of Parker immunity is immediately appealable by
governmental defendants).
91. Just as it is unclear whether actions of the governor constitute actions of the state itself, see
supra note 49, it is unclear which state executive agencies or state regulatory bodies are part of the
state. Compare Ajax Aluminum, Inc. v. Goodwill Indus., 564 F.Supp. 628, 629 (W.D. Mich. 1983)
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ble orders because they satisfy the Supreme Court’s three-pronged test
for determining whether a ruling falls within the collateral order doctrine.
Embedded within the larger issue of interlocutory appeals of a state action ruling as a collateral order is the “unsettled issue” of whether the
state action doctrine provides immunity from suit or merely a defense to
liability.93 Resolving this unsettled issue is critical to determining whether a state action ruling against the government satisfies each of the three
prongs of the collateral order doctrine.94
The three prongs of the collateral order doctrine overlap,95 making
the doctrine extremely difficult to apply.96 Despite the overlap between
the three prongs, this Part analyzes each prong of the collateral order
doctrine individually. Furthermore, although it is immersed in each
prong,97 the question of whether the state action doctrine is an immunity
from suit or merely a defense to liability is most important to the third
prong, the condition of unreviewability upon appeal from final judgment.
Accordingly, this Part considers the application of the three-pronged test
for the collateral order doctrine in the reverse order—unreviewability,
separability, and conclusiveness—from which the prongs were articulated by the Supreme Court.
A. Unreviewability
The unreviewability prong of the collateral order doctrine is the requirement that an issue be effectively unreviewable on appeal from a
final judgment.98 An order is effectively unreviewable when it protects
(ruling that Michigan’s department of labor was part of the state), with Midwest Constr. Co. v. Ill.
Dep’t of Labor, 684 F.Supp. 991, 997 (N.D. Ill. 1988) (determining Illinois’s department of labor
was not part of the state). The Supreme Court has not provided much guidance for distinguishing
between the state itself and subordinate agencies, but has cautioned that ‘‘[s]tate agencies are not
simply by their governmental character sovereign actors for purposes of state-action immunity.”
N.C. State Bd. of Dental Exam’rs v. FTC, 135 S. Ct. 1101, 1111 (2015). For conflicting judicial
approaches in determining whether an entity qualifies as an “arm of the state” for purposes of state
sovereign immunity under the Eleventh Amendment, see infra note 174.
92. Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 546 (1949).
93. STATE ACTION PRACTICE MANUAL, supra note 7, at 156.
94. See id. (“If the [state action] doctrine properly immunizes a defendant from standing trial, it
would follow that the denial of a defendant’s preliminary motion on state action grounds is immediately appealable.”).
95. See Palmer v. City of Chicago, 806 F.2d 1316, 1318 (7th Cir. 1986) (noting that the multipronged test for collateral orders is “redundant” and that the “[conclusiveness] ‘prong’ is part of the
[unreviewability prong]”).
96. See Palmer, 806 F.2d at 1318 (stating the Supreme Court’s brief discussion of collateral
orders in Cohen “has spawned an immense jurisprudence of collateral orders”); Petty, supra note 65,
at 396.
97. STATE ACTION PRACTICE MANUAL, supra note 7, at 156.
98. Will v. Hallock, 546 U.S. 345, 349 (2006).
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an interest that would be “essentially destroyed if its vindication must be
postponed until trial is completed.”99 One such interest is a “right not to
be tried.”100 A denial of the right not to be tried is effectively unreviewable on appeal from a final judgment because to get to such a final judgment, the defendant must endure the trial-related burdens that the right is
supposed to prohibit. In other words, a defendant’s right to not stand trial
cannot be effectively vindicated after the trial has occurred. Accordingly,
the classic case of an issue essentially unreviewable on appeal from a
final judgment is a denial of immunity.101
The Supreme Court has consistently invoked the collateral order
doctrine to permit the review of orders denying immunity to governmental defendants. For example, as stated previously, the Court has found
denials of executive immunity,102 qualified immunity for government
officials,103 state sovereign immunity,104 and federal employees’ claims
of immunity under the Westfall Act105 to be immediately appealable under the collateral order doctrine. Because the immunity theory has been
so favorably received under the collateral order doctrine, one commentator noted that the Supreme Court has “narrowed the scope of the doctrine
to the point where today it is largely limited to immunities from trial”
and that “nearly all other [types of] orders . . . [are] excluded from the
collateral order club.”106 In contrast to an order denying immunity from
suit, the rejection of a defense to a claim is not effectively unreviewable
on appeal from a final judgment because a finding of liability can be reversed on appeal.107 Determining whether the state action doctrine is an
immunity from suit or merely a defense to liability is, therefore, critical
to establishing whether the unreviewability prong of the collateral order
doctrine is satisfied.
99. Lauro Lines S.R.L. v. Chasser, 490 U.S. 495, 499 (1989).
100. Midland Asphalt Corp. v. United States, 489 U.S. 794, 800 (1989).
101. DANA LIVINGSTON COBB, INTERLOCUTORY APPEALS AND MANDAMUS IN FEDERAL
COURT 4 (2004), available at http://www.adjtlaw.com/assets/Federal%20Interloc%20Appeal%20
and%20Mandamus%20UT%20App%202004.pdf.
102. Nixon v. Fitzgerald, 457 U.S. 731, 742 (1982).
103. Mitchell v. Forsyth, 472 U.S. 511, 530 (1985).
104. P.R. Aqueduct & Sewer Auth. v. Metcalf & Eddy, Inc., 506 U.S. 139, 144–45 (1993).
105. Osborn v. Haley, 549 U.S. 225, 237–40 (2007).
106. Petty, supra note 65, at 362, 384.
107. See Mitchell, 472 U.S. at 526 (accentuating that the right not to stand trial is an immunity
from suit, not a “mere defense to liability” and that such an entitlement is “effectively lost if a case is
erroneously permitted to go to trial”).
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1. State Sovereignty and Federalism as Evidence of Immunity
This Article asserts that the state action doctrine is an immunity
from suit for governmental defendants deemed part of the state and not
merely a defense to liability. Concededly, the Supreme Court’s own
characterization of the state action doctrine is not very helpful in determining whether the doctrine operates as an immunity or a defense.108 The
Court has used a variety of terms to describe the state action doctrine.
For example, the Court has alternated between calling the Parker protection an “immunity”109 and an “exemption.”110 Some commentators, however, have suggested that the terms “Parker immunity” and “state action
immunity” are nothing more than misnomers.111 Indeed, Justice Brennan
in his dissent in Mitchell v. Forsyth—a case approving the immediate
appealability of an order denying qualified immunity to governmental
officials—questioned the accuracy of the term “state action immunity.”112
Despite these views, the constitutional principles underlying the
state action doctrine demonstrate that the term “Parker immunity” is not
a misnomer and accurately describes a right to be free from suit. In this
regard, state sovereignty and federalism form a strong basis for the state
action doctrine.113 The Court in Parker v. Brown explicated that “[i]n a
108. STATE ACTION PRACTICE MANUAL, supra note 7, at 2 n.7 (noting “the lack of a uniform
characterization of the state action doctrine by the courts”).
109. See, e.g., FTC v. Phoebe Putney Health Sys., Inc., 133 S. Ct. 1003, 1010 (2013) (using the
term “state-action immunity”); City of Columbia v. Omni Outdoor Adver., Inc., 499 U.S. 365, 370
(1991) (using the term “Parker immunity” to refer to the state action doctrine); Cal. Retail Liquor
Dealers Ass’n v. Midcal Aluminum, Inc., 445 U.S. 97, 105 (1980) (using the phrase “standards for
antitrust immunity under Parker v. Brown”); City of Lafayette v. La. Power & Light Co., 435 U.S.
389, 412, 415 (1978) (also using “Parker immunity” to refer to the state action doctrine).
110. See, e.g., Town of Hallie v. City of Eau Claire, 471 U.S. 34, 37 (1985) (using the term
“state action exemption”); Cmty. Commc’ns Co. v. City of Boulder, 455 U.S. 40, 50 (1982) (using
the term “Parker exemption”); see also Hoover v. Ronwin, 466 U.S. 558, 573 (1984) (using the
phrase “exempt from Sherman Act liability”).
111. See, e.g., Randall S. Abate & Mark E. Bennett, Constitutional Limitations on Anticompetitive State and Local Solid Waste Management Schemes: A New Frontier in Environmental Regulation, 14 YALE J. ON REG. 165, 174 (1997) (deeming the term “state action immunity” a “misnomer”); see also Duke & Co. Inc. v. Foerster, 521 F.2d 1277, 1279 n.5 (1975) (acknowledging the
uncertainty in the proper characterization of the state action doctrine and that the issue “may be open
to question”).
112. See Mitchell, 472 U.S. at 552–53 n.8 (1985) (Brennan, J., dissenting) (stating “numerous
legal rights traditionally recognized as immunities include . . . the state-action immunity in antitrust
law” but doubting “that the ordinary characterization of a wide variety of legal claims as ‘immunities’ establishes that trial court orders rejecting such claims are necessarily unreviewable at the termination of proceedings”).
113. Omni Outdoor Adver., 499 U.S. at 370 (asserting the state action doctrine relies on “principles of federalism and state sovereignty”); see STATE ACTION PRACTICE MANUAL, supra note 7, at
1–2 (“At its heart, the state action doctrine respects the reserved authority of the several states to
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dual system of government in which, under the Constitution, the states
are sovereign, save only as Congress may constitutionally subtract from
their authority, an unexpressed purpose to nullify a state’s control over
its officers and agents is not lightly to be attributed to Congress.”114
Thus, the Court reasoned that, in light of states’ sovereign status and
principles of federalism, Congress would not have intruded on states prerogatives through the Sherman Act without expressly saying so.115
Subsequent Supreme Court decisions have recognized116 and accepted117 the constitutional principles of state sovereignty and federalism
as a justification for the state action doctrine. Notably, in its most recent
state action decision, North Carolina State Board of Dental Examiners v.
FTC, the Supreme Court recognized that “the Sherman Act confers immunity on the States’ own anticompetitive policies out of respect for federalism.”118 Even the FTC has acknowledged that the state action doctrine is rooted in the constitutional notions of federalism and state sovereignty.119 The Court’s steadfast justification of the state action doctrine
on federalism and state sovereignty grounds,120 therefore, proves that the
doctrine is an immunity from suit.
regulate economic activity within their respective borders as against the power of Congress to regulate interstate commerce.”).
114. Parker v. Brown, 317 U.S. 341, 351 (1943).
115. Id. The state action doctrine’s logic has even been invoked to restrict the FTC’s rulemaking authority to abrogate state regulations. See Cal. State Bd. of Optometry v. FTC, 910 F.2d 976,
978 (D.C. Cir. 1990). In that case, the D.C. Circuit struck down an FTC rule that created a defense to
any state proceeding brought against an optometrist for violating certain state restrictions upon the
practice of optometry. The court directly relied upon state action cases to conclude that a federal
agency “may not exercise authority over States as sovereigns unless that authority has been unambiguously granted to it.” Id. at 982.
116. See, e.g., Town of Hallie v. City of Eau Claire, 471 U.S. 34, 38 (1985) (“In Parker, relying on principles of federalism and state sovereignty, the Court refused to construe the Sherman Act
as applying to the anticompetitive conduct of a State acting through its legislature”); FTC v. Ticor
Title Ins. Co., 504 U.S. 621, 633 (1992) (asserting “[o]ur decision [in Parker] was grounded in principles of federalism”).
117. See, e.g., Omni Outdoor Adver., 499 U.S. at 372 (concluding that “in order to prevent
Parker from undermining the very interests of federalism it is designed to protect, it is necessary to
adopt a concept of authority broader than what is applied to determine the legality of the municipality’s action under state law”).
118. N.C. State Bd. of Dental Exam’rs v. FTC, 135 S.Ct. 1101, 1110 (2015).
119. FTC OFFICE OF POLICY PLANNING, REPORT OF THE STATE ACTION TASK FORCE 5 (2003),
available at http://www.ftc.gov/os/2003/09/stateactionreport.pdf (recognizing that “[t]his refrain
[respecting state sovereignty in our dual system of government] runs through Supreme Court jurisprudence up through its most recent state action opinion”).
120. See supra notes 113–118 and accompanying text; see also Daniel J. Gifford, Federalism,
Efficiency, the Commerce Clause, and the Sherman Act: Why We Should Follow a Consistent
Free-Market Policy, 44 EMORY L.J. 1227, 1242 (1995) (opining that “the state-action antitrust exemption has always been justified primarily on the grounds of federalism”); Jean Wegman Burns,
Embracing Both Faces of Antitrust Federalism: Parker and ARC America Corp, 68 ANTITRUST L.J.
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Like its interpretation of the state action doctrine, the Court’s interpretation of the Eleventh Amendment has also been guided by the concepts of state sovereignty and the balance of power between the states
and the federal government.121 For example, in Puerto Rico Aqueduct &
Sewer Authority v. Metcalf & Eddy, Inc., the Court held that a denial of
Eleventh Amendment immunity was immediately appealable under the
collateral order doctrine because of the importance of protecting a state’s
dignitary interests.122 Because the Court’s interpretation of the scope of
the state action doctrine and Eleventh Amendment rely on the common
interests of federalism and state sovereignty, they should be analyzed
similarly. Thus, like denial of Eleventh Amendment immunity, denials of
Parker immunity for governmental defendants should be immediately
appealable under the collateral order doctrine.
Additionally, in attempting to articulate a line between cases that
involve collateral orders and those that do not, the Supreme Court has
stated, “it is not mere avoidance of a trial, but avoidance of a trial that
would imperil a substantial public interest, that counts when asking
whether an order is ‘effectively’ unreviewable if review is to be left until
later.”123 The Court explained that a party asserting that an order is effectively unreviewable upon final judgment because of a right not to go to
29, 29 (2000) (“Beginning with its 1943 decision in Parker v. Brown, the Supreme Court has used
federalism principles to define the scope of the federal antitrust laws and to protect state activity in
the same area”) (footnote omitted). Interestingly, some scholars criticize the state action doctrine for
failing to promote economic efficiency, which they posit, is a fundamental goal of federalism itself.
See, e.g., Robert P. Inman & Daniel L. Rubinfield, Making Sense of the Antitrust State-Action Doctrine: Balancing Political Participation and Economic Efficiency in Regulatory Federalism, 75 TEX.
L. REV. 1203, 1207 (1997) (contending that “[f]ederalism’s goal of economic efficiency . . . is not
well protected by present state-action doctrine”); see also John Shepard Wiley Jr., Revision and
Apology in Antitrust Federalism, 96 YALE L.J. 1277, 1280 (1987) (arguing that the current state
action doctrine is “irrational antitrust policy” and “offend[s] every antitrust goal”).
121. See Fed. Mar. Comm’n v. S.C. State Ports Auth., 535 U.S. 743, 751 (2002) (asserting that
“[d]ual sovereignty is a defining feature of our Nation’s constitutional blueprint” and states “did not
consent to become mere appendages of the Federal Government”) (internal citations omitted); Alden
v. Maine, 527 U.S. 706, 709 (1999) (“Federalism requires that Congress accord States the respect
and dignity due them as residuary sovereigns and joint participants in the Nation’s governance.”);
Stewart A. Baker, Federalism and the Eleventh Amendment, 48 U. COLO. L. REV. 139, 172 (1977)
(noting that “[c]onsiderations of federalism seem to underlie all aspects of the [E]leventh
[A]mendment”). See generally Richard H. Fallon, Jr., The “Conservative” Paths of the Rehnquist
Court’s Federalism Decisions, 69 U. CHI. L. REV. 429, 439, 457 (2002) (exploring the “role of sovereign immunity in the Court’s federalism agenda” and noting that a “prominent line” of “federalism
cases involves the Eleventh Amendment and state sovereign immunity”).
122. P.R. Aqueduct & Sewer Auth. v. Metcalf & Eddy, Inc., 506 U.S. 139, 147 (1993) (ruling
that states “may take advantage of the collateral order doctrine to appeal a district court order denying a claim of Eleventh Amendment immunity”).
123. Will v. Hallock, 546 U.S. 345, 353 (2006) (quoting Coopers & Lybrand v. Livesay, 437
U.S. 463, 468 (1978)).
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trial must identify “some particular value of a high order . . . in avoiding
trial.”124 The Court identified “respecting a State’s dignitary interests” as
a “particular value of a high order.”125 Because the state action doctrine
protects important dignitary and public interests, which would be lost if
an antitrust suit against a state or an entity deemed part of the state is allowed to proceed to trial,126 denial of an order to dismiss is effectively
unreviewable after trial.
State action immunity is analogous to Eleventh Amendment immunity because each is designed “to prevent the indignity of subjecting a
State to the coercive process of judicial tribunals . . . and to ensure that
the States’ dignitary interests can be fully vindicated.”127 In fact, antitrust
lawsuits that are allowed to proceed against a state are more offensive to
a state’s dignitary interests than other types of lawsuits because of the
costliness of antitrust litigation.128 Forcing state governmental defendants
to undergo a costly trial process is unfair and incompatible with the spirit
of the Eleventh Amendment and Parker immunity. Just as orders denying Eleventh Amendment immunity are immediately appealable under
the collateral order doctrine,129 so too should rulings denying Parker
immunity be immediately appealable under the doctrine.
2. Challenges to Characterizing the State Action Doctrine as Something
Other Than an Immunity
Despite the similarities between the Eleventh Amendment and the
state action doctrine, some circuits have found rulings denying state action immunity not immediately appealable under the collateral order doctrine. These courts maintain that the Court in Parker v. Brown was simply construing the Sherman Act, rather than “identify[ing] or articulat[ing]
a constitutional or common law ‘right not to be tried,’”130 and point to the
following passage from Parker for support:
124. Id. at 352.
125. Id. (citing P.R. Aqueduct & Sewer Auth., 506 U.S. at 146).
126. However, the state action doctrine does not protect these same important interests if suit
against a municipality or other governmental entity not deemed part of the state is allowed to proceed to trial. See infra Part IV.A.
127. Martin v. Mem’l Hosp., 86 F.3d 1391, 1395–96 (5th Cir. 1996) (citing P.R. Aqueduct &
Sewer Auth., 506 U.S. at 146).
128. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 558 (2007) (noting that “proceeding to
antitrust discovery can be expensive”); see also William Kolasky, Antitrust Litigation: What’s
Changed in Twenty-Five Years?, 27 ANTITRUST 9, 15 (2012) (explaining that “e-discovery has been
one of the main reasons antitrust litigation has become increasingly expensive, both for plaintiffs and
defendants”).
129. P.R. Aqueduct & Sewer Auth., 506 U.S. at 147.
130. S.C. State Bd. of Dentistry v. FTC, 455 F.3d 436, 444 (4th Cir. 2006).
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We find nothing in the language of the Sherman Act or in its history
which suggests that its purpose was to restrain a state or its officers
or agents from activities directed by its legislature. In a dual system
of government in which, under the Constitution, the states are sovereign, save only as Congress may constitutionally subtract from
their authority, an unexpressed purpose to nullify a state’s control
over its officers and agents is not lightly to be attributed to Congress.131
However, such reasoning seems unsound and tends to ignore the similar
justification of protecting the state’s dignitary interests underlying the
Court’s interpretation of the Eleventh Amendment and the state action
doctrine. Alternatively, it appears as if the Court was creating a common
law right not to be tried.
Some scholars observe that the Court in Parker went out of its way
to create the state action doctrine and that the Court “displayed extraordinary confidence and willingness to make law in Parker.”132 One possible explanation as to why the Court went out of its way to create the state
action doctrine is that the Court recognized the importance of state sovereignty as well as federalism and felt the need to articulate these principles in the context of antitrust law. Consequently, the argument that the
state action doctrine is not an immunity because the Court in Parker did
not expressly articulate “a constitutional or common law right not to be
tried” conveniently overlooks the important, parallel rationales underlying both the state action doctrine and Eleventh Amendment immunity.133
Despite what some commentators have asserted,134 the term “immunity” is not a misnomer when the state action doctrine protects governmental defendants that are deemed part of the state itself. In fact, the
term “exemption” is rather inappropriate135 and “[r]eference to the Parker doctrine as the ‘state-action exemption’ is a confusing misuse of the
131. Parker v. Brown, 317 U.S. 341, 350–51 (1943); see Acoustic Sys. Inc. v. Wenger Corp.,
207 F.3d 287, 292 n.3 (5th Cir. 2000) (claiming the term “state action immunity” is “actually a misnomer because the doctrine is but a recognition of the limited reach of the Sherman Act”); see also
Surgical Care Ctr. of Hammond, L.C. v. Hosp. Serv. Dist. No. 1, 171 F.3d 231, 234 (5th Cir. 1999)
(stating “[w]hile thus a convenient shorthand, ‘Parker immunity’ is more accurately a strict standard
for locating the reach of the Sherman Act”).
132. See, e.g., John Shepard Wiley Jr., A Capture Theory of Antitrust Federalism, 99 HARV. L.
REV. 713, 715–17 (1986).
133. See supra Part III.A.1.
134. See supra notes 110–112 and accompanying text.
135. See Ricardo J. Bascuas, Note, Cheaters, Not Criminals: Antitrust Invalidation of Statutes
Outlawing Sports Agent Recruitment of Student Athletes, 105 YALE L.J. 1603, 1622 (1996).
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term ‘exemption.’”136 The Court in Parker concluded that Congress did
not intend to apply antitrust laws to conduct sanctioned by state governments.137 Characterizing the state action doctrine as an “exemption” is,
therefore, inaccurate because conduct that does not violate an act hardly
needs to be exempted from its operation.138
One influential antitrust treatise has asserted that the “Parker
doctrine is designed to be an immunity, not merely a defense that can be
offered at trial.”139 This statement makes sense in light of the fact that the
state action doctrine—like the Eleventh Amendment140—has consistently
been viewed through the lens of federalism and state sovereignty by the
Supreme Court.141 Therefore, like the Eleventh Amendment, the state
action doctrine should be considered an immunity in the context of litigation involving state governmental defendants. The unreviewability prong
of the collateral order doctrine is frequently found to be met in cases
where an immunity is asserted because “‘the bell could not be un-rung’ if
the parties had to wait for an appeal from a final judgment.”142 Because
the state action doctrine is in fact an immunity from suit and not merely a
defense to liability, Parker immunity satisfies the unreviewability prong
of the collateral order doctrine.
B. Separability
Parker immunity similarly satisfies the separability prong of the
collateral order doctrine, which requires that a ruling resolve an important issue completely separate from the merits of the action.143 This is
136. Kenneth J. King, Note, The Preemption Alternative to Municipal Antitrust Liability, 51
GEO. WASH. L. REV. 145, 145 n.5 (1982).
137. Parker v. Brown, 317 U.S. 341, 350–51 (1943).
138. Paul E. Slater, Antitrust and Government Action: A Formula for Narrowing Parker v.
Brown, 69 NW. U. L. REV. 71, 72 n.4 (1974).
139. PHILLIP E. AREEDA & HERBERT HOVENKAMP, FUNDAMENTALS OF ANTITRUST LAW,
§ 2.04b, at 2-50 (4th ed. 2011). But see ANTITRUST LAW DEVELOPMENTS, supra note 2, at 1272
(characterizing the state action doctrine as an “affirmative defense”).
140. Fed. Mar. Comm’n v. S.C. State Ports Auth., 535 U.S. 743, 756 (2002) (quoting P.R.
Aqueduct & Sewer Auth. v. Metcalf & Eddy, Inc., 506 U.S. 139, 146 (1993)) (stating the “central
purpose” of the sovereign immunity doctrine “is to ‘accord the States the respect owed them as’ joint
sovereigns”); see Younger v. Harris, 401 U.S. 37, 44 (1971) (noting state sovereign immunity is a
fundamental principle of “Our Federalism”); John Evans Taylor, Note, Express Waiver of Eleventh
Amendment Immunity, 17 GA. L. REV. 513, 520–21 (1983) (stating that common law sovereign
immunity principles have informed the Eleventh Amendment doctrine and that “courts treat the
[E]leventh [A]mendment as a tool of federalism”).
141. See Lopatka & Page, supra note 4, at 277 (“Oddly, the Court has never explained why
federalism dictates the specific form of the [state action] doctrine that has taken shape over the
years.”).
142. CASTANIAS & KLONOFF, supra note 65, at 85.
143. Will v. Hallock, 546 U.S. 345, 349 (2006).
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the requirement that an order address a “collateral” issue.144 The “textbook case” of a collateral issue is a defense of immunity from suit.145 For
example, determinations of Parker immunity involving governmental
defendants deemed part of the state require an inquiry completely separate from the merits of the underlying issue of whether an antitrust violation occurred.146 State action determinations for government entities that
are deemed part of the state only involve a discrete issue of law: Whether the action is that of a state acting as a sovereign?147 Thus, a determination of Parker immunity for governmental defendants deemed part of the
state can be resolved without an elaborate inquiry into the merits of the
underlying antitrust action.148 Even courts that have found a denial of
Parker immunity not immediately appealable recognize that state action
doctrine analysis is separable from the merits of an antitrust action when
the defendant is a government entity that is part of the state.149
In addition, the Supreme Court has gone out if its way to find that
different types of immunity satisfy the collateral order doctrine’s “completely separate from the merits” condition. For example, in Mitchell v.
Forsyth, the Court plainly altered the “completely separate from the merits” prong to find qualified immunity immediately appealable.150 The
Court asserted that the second prong of the collateral order doctrine was
satisfied because the issue of immunity was “conceptually distinct” from
the merits.151 This “significant and unclarified dilution of the separability
144. CASTANIAS & KLONOFF, supra note 65, at 84.
145. Id.; see Petty, supra note 65, at 399 (averring “that a right not to stand trial passes th[e]
test” of being an issue completely separate from the merits).
146. See AREEDA & HOVENKAMP, supra note 1, ¶ 228a, at 227 (stating “[i]t bears emphasis
that the absence of an immunity does not indicate the presence of an antitrust offense”).
147. See Hoover v. Ronwin, 466 U.S. 558, 570, 574 (1984) (stating “[w]hen the conduct is that
of the sovereign itself . . . the danger of unauthorized restraint of trade does not arise” and “[t]he
only requirement is that the action be that of the State acting as a sovereign”).
148. This is not to say that the question of whether a governmental entity qualifies as part of
the state acting as a sovereign does not involve a complex, fact-laden inquiry. See supra note 91.
Indeed, a recurring issue raised by the state action doctrine is whether a state regulatory board must
meet either or both of the Midcal prongs. STATE ACTION PRACTICE MANUAL, supra note 7, at 112;
see N.C. State Bd. of Dental Exam’rs v. FTC, 135 S. Ct. 1101, 1110 (2015). Thus, an inquiry into
the structure of a state regulatory board to determine whether it is a private actor or a governmental
entity that is part of the state may sometimes be difficult. However, such a question does not involve
an in-depth examination of the merits of the substantive antitrust violation; it is strictly an inquiry
into the identity of the defendant.
149. See, e.g., S.C. State Bd. of Dentistry v. FTC, 455 F.3d 436, 442–43 (4th Cir. 2006) (stating “[t]o be sure, the Parker analysis does not always require an inquiry into whether the state acted
to displace competition; the ipso facto exemption [immunity for government entities part of the
state] turns only on the identity of the defendant”).
150. Mitchell v. Forsyth, 472 U.S. 511, 527 (1985).
151. Id.
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requirement” illustrates the Court’s resounding commitment to the immediate appealablity of denials of immunity.152 Because the state action
doctrine is an immunity for governmental defendants deemed part of the
state itself,153 there is a strong possibility that the Supreme Court could
find that a trial court’s denial of Parker immunity satisfies the collateral
order doctrine’s separability prong.
C. Conclusiveness
The conclusiveness prong of the collateral order doctrine requires
that a ruling “conclusively determine the disputed question.”154 This is
the most straightforward prong of the collateral order doctrine155 and the
condition that is easiest to satisfy.156 It is simply an inquiry into whether
the district court’s order finally and conclusively determines the disputed
question.157 A court’s denial of a governmental defendant’s motion to
dismiss an antitrust claim under the state action doctrine conclusively
disposes of the question of whether the governmental entity may be subject to suit. One court that has held denials of Parker immunity not immediately appealable has even acknowledged that “[t]here is no dispute
that the denial of Parker protection satisfies the first collateral order requirement.”158
For a question to be “conclusively determined,” it must not be a
tentative ruling that is likely to be subject to later reconsideration.159 Unlike an evidentiary ruling on a motion in limine, a ruling on the state action doctrine is not a tentative or informal order. An adverse ruling
against a defendant on the state action doctrine is unlikely to be revised
before the entry of judgment on the underlying question of whether an
152. Glynn, supra note 87, at 207; see Steinman, supra note 87, at 1254 (criticizing the Court’s
treatment of the “separate from the merits” requirement in immunity cases).
153. See supra Part III.A.
154. P.R. Aqueduct & Sewer Auth. v. Metcalf & Eddy, Inc., 506 U.S. 139, 144 (1993).
155. Petty, supra note 65, at 398.
156. Steinman, supra note 87, at 1254–55 (maintaining that the conclusiveness prong is “easily
met in connection with almost all interlocutory orders,” that the collateral order doctrine embodies a
“relaxed definition of finality,” and that the other two elements of the doctrine do most of the “legwork” in preventing orders from being immediately appealable); see Moses H. Cone Mem’l Hosp. v.
Mercury Constr. Corp., 460 U.S. 1, 12–13 (1983) (holding that a district court’s stay order was appealable as a final decision because the requirement that a matter be conclusively determined should
be evaluated from a practical, not rigid, standpoint).
157. Coopers & Lybrand v. Livesay, 437 U.S. 463, 468 (1978).
158. S.C. State Bd. of Dentistry v. FTC, 455 F.3d 436, 441 (4th Cir. 2006).
159. Coopers & Lybrand, 437 U.S. at 468–69 n.11 (finding that before the addition of Rule
23(f) to the Federal Rules of Civil Procedure, which now permits interlocutory review of class certification rulings, denials of class certification were “inherently tentative” and thus not conclusive
determinations of the disputed issue).
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antitrust violation actually occurred.160 Consequently, any denial of Parker immunity, regardless of whether the defendant is a governmental entity or private party, satisfies the conclusiveness prong of the collateral
order doctrine.
D. Preserving Judicial Economy
One of the most important rationales behind the final judgment rule
limiting immediate appeals is a desire to achieve judicial economy and
efficiency. The Supreme Court has maintained that permitting piecemeal,
prejudgment appeals “undermines ‘efficient judicial administration.’”161
Hence, the Court has cautioned that “the class of collaterally appealable
orders must remain ‘narrow and selective in its membership.’”162 However, orders denying state action immunity to governmental defendants
deemed part of the state warrant membership within this “narrow and
selective” class of orders that are immediately appealable.
Allowing the immediate appeal of orders denying Parker immunity
to governmental entities deemed part of the state will not undermine “efficient judicial administration”163 and judicial economy because very few
antitrust cases involving the state action doctrine will be immediately
appealable under the collateral order doctrine. There are few instances in
which the state action doctrine is litigated that will have an actual state as
the defendant—the doctrine is mostly invoked by private parties, municipalities, and quasi-governmental entities such as state regulatory
boards.164 Because orders denying Parker immunity should not be immediately appealable by those defendants needing to satisfy either or
both Midcal prongs (i.e., municipalities, state regulatory boards, private
parties, etc.),165 only a small subset of cases will be immediately appeal 160. See Fisher v. City of Berkeley, 475 U.S. 260, 281 (1986) (upholding municipal rent control scheme without addressing the applicability of the state action doctrine because there was no
violation of the substantive antitrust laws).
161. Mohawk Indus., Inc. v. Carpenter, 558 U.S. 100, 106 (2009) (quoting Firestone Tire &
Rubber Co. v. Risjord, 449 U.S. 368, 374 (1981).
162. Id. at 113 (quoting Will v. Hallock, 546 U.S. 345, 350 (2006)).
163. Id. at 106.
164. See STATE ACTION PRACTICE MANUAL, supra note 7, at 110 (noting that only a “relatively small group of cases involve the direct actions of a sovereign state authority”); Susan Beth
Farmer, Balancing State Sovereignty and Competition: An Analysis of the Impact of Seminole Tribe
on the Antitrust State Action Immunity Doctrine, 42 VILL. L. REV. 111, 183, 185 (1997) (claiming
the Court’s decision in Seminole Tribe of Florida v. Florida, 517 U.S. 44 (1996), “essentially eliminates the need for state action immunity with respect to suits against states” and that “the relevance
and need for the state action doctrine is now basically limited to private actors”).
165. See infra Part IV.A (discussing municipalities and state regulatory boards); infra Part
IV.B (discussing private parties).
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able under the collateral order doctrine. Thus, this Article’s conclusion
that governmental entities deemed part of the state are allowed to appeal
adverse rulings on Parker immunity does not thrust open the floodgates
to scores of appeals and will not undermine judicial economy.
Even if many state action cases include a governmental defendant
that can immediately appeal an adverse ruling under the collateral order
doctrine, there still would be no disruption of “efficient judicial administration.” Governmental defendants “typically fare well on motions to
dismiss based on the state action doctrine” and only in “rare circumstances” will courts deny a governmental defendant’s motion to dismiss
after invoking Parker immunity.166 Consequently, allowing the immediate appeal of orders denying Parker immunity to governmental entities
will not undermine judicial economy because very few antitrust cases
will be subject to the collateral order doctrine at the outset of litigation.
IV. DEFENDANTS NEEDING TO SATISFY ONE OR BOTH OF THE MIDCAL
PRONGS
Even if defendants are not governmental entities deemed part of the
state, they may still be able to successfully assert a claim of Parker immunity if they can satisfy one or both of the Midcal prongs.167 However,
this Part asserts that defendants needing to satisfy Midcal’s clear articulation or active supervision prongs should not be able to immediately appeal an adverse state action determination under the collateral order doctrine.
A. Governmental Entities Not Deemed Part of the State
Local governmental entities, such as counties and municipalities,
may seek protection under the state action doctrine when they act
anticompetitively.168 State regulatory boards, agencies, authorities, and
commissions are also entities that sometimes attempt to avail themselves
of Parker immunity when they act anticompetitively.169 These govern 166. STATE ACTION PRACTICE MANUAL, supra note 7, at 135, 138; see PHILIP E. AREEDA &
HERBERT HOVENKAMP, FUNDAMENTALS OF ANTITRUST LAW § 2.04b, at 2-49 (4th ed. 2011) (claiming “many” state action determinations “can be resolved at the summary judgment stage or earlier”).
167. Cal. Retail Liquor Dealers Ass’n v. Midcal Aluminum, Inc., 445 U.S. 97, 105–06 (1980);
see supra text accompanying notes 47–49.
168. Town of Hallie v. City of Eau Claire, 471 U.S. 34, 36 (1985).
169. See, e.g., Rectrix Aerodrome Ctrs., Inc. v. Barnstable Mun. Airport Comm’n, 610 F.3d 8,
9 (1st Cir. 2010) (airport authority seeking Parker protection); S.C. State Bd. of Dentistry v. FTC,
455 F.3d 436, 438–39 (4th Cir. 2006) (state regulatory board); Askew v. DCH Reg’l Health Care
Auth., 995 F.2d 1033, 1034 (11th Cir. 1993) (public health care authority); Porter Testing Lab. v.
Bd. of Regents, 993 F.2d 768, 769 (10th Cir. 1993) (board overseeing state colleges).
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mental entities must satisfy the clear articulation prong of the Midcal test
because they are not entities deemed part of the state itself.170 Orders
denying Parker immunity to governmental defendants who must satisfy
Midcal’s clear articulation prong should not be immediately appealable
because such orders fail to satisfy the second and third conditions of the
collateral order doctrine.
1. Unreviewability
Actions against governmental entities that must satisfy the clear articulation requirement are not effectively unreviewable upon final judgment because the state action doctrine functions as a defense rather than
an immunity for these types of entities. The Eleventh Amendment once
again provides guidance on whether the state action doctrine is an immunity from suit or a defense to liability. The Supreme Court has ruled
that municipalities and other local government entities are not treated as
sovereign and do not receive immunity under the Eleventh Amendment.171 Correspondingly, the Court has asserted that local government
entities are ineligible for “sovereign” treatment under the state action
doctrine. The Court stated, “[c]ities are not themselves sovereign; they
do not receive all the federal deference of the States that create them.”172
Therefore, when used in the context of subordinate government entities,
“Parker immunity” is a misnomer.
Furthermore, orders denying state action protection to governmental entities that must satisfy Midcal’s clear articulation prong are not effectively unreviewable upon final judgment because those entities cannot
170. Town of Hallie, 471 U.S. at 40; Hoover v. Ronwin, 466 U.S. 558, 569–574 (1984); see
S. Motor Carriers Rate Conference, Inc. v. United States, 471 U.S. 48, 63 (1985) (stating “Parker
immunity is available only when the challenged activity is undertaken pursuant to a clearly articulated policy of the State itself, such as a policy approved by a state legislature or a State Supreme
Court”). It should be noted that some regulatory boards and commissions will be deemed private
actors. See N.C. State Bd. of Dental Exam’rs v. FTC, 135 S. Ct. 1101, 1114 (2015) (concluding that
state dentistry board must satisfy both Midcal prongs because board was controlled by active market
participants and was akin to a private trade association vested with regulatory authority). Thus, in
addition to the difficult task of distinguishing an agency part of the “state itself” from a subordinate
government agency, see supra note 91, courts may also have to address the “vexatious question” of
whether an agency is a public or private actor. AREEDA & HOVENKAMP, supra note 1, ¶ 227a, at 215
(emphasizing that “establishing immunity in a particular case requires a determination of whether
the relevant actor is properly classified as the “state itself” [neither clear articulation nor active supervision required], a subordinate agency or subdivision [clear articulation required but not active
supervision], or merely a private actor [requiring both clear articulation and active supervision]”).
171. See Lincoln Cnty. v. Luning, 133 U.S. 529, 533 (1890) (holding the Eleventh Amendment
does not bar an individual’s suit in federal court against a county for nonpayment of a debt).
172. City of Lafayette v. La. Power & Light Co., 435 U.S. 389, 412 (1978).
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identify a “particular value of a high order . . . in avoiding trial.”173 Local
government entities are not entitled to the same protection as a state itself, and the same concern about protecting a sovereign’s dignitary interests is not present. Accordingly, the state action doctrine does not operate
as an immunity for local governmental entities and thus fails to meet the
unreviewability prong of the collateral order doctrine.
Similar to the treatment of local governmental entities, the state action doctrine does not operate as an immunity for those state regulatory
boards and agencies that are not granted independent sovereign status.
The Eleventh Amendment provides immunity only to a governmental
entity deemed an “arm of the state.”174 Likewise, courts considering the
applicability of the state action doctrine must also make a determination
of whether a governmental entity is part of the state itself and eligible for
sovereign treatment since an entity deemed part of the state need not
meet the Midcal test.175 Just as a determination must be made regarding
whether an entity qualifies as sovereign in the Eleventh Amendment context in order to ascertain whether an entity qualifies for immunity, a similar determination of whether an entity qualifies as part of the state is
made in the antitrust state action framework. Because the state action
doctrine does not operate as an immunity for governmental entities that
are not part of the state, the unreviewability prong of the collateral order
doctrine is not satisfied. Drawing the line between the state itself and
subordinate governmental entities that are not part of the state in determining whether state action protection is an immunity may seem artificial; however, this distinction makes sense when analogized to how entities are granted Eleventh Amendment protection.176
173. Compare Will v. Hallock, 546 U.S. 345, 352 (2006) (quoting Coopers & Lybrand v.
Livesay, 437 U.S. 463, 468 (1978)), with supra text accompanying notes 123–126.
174. N. Ins. Co. of N.Y. v. Chatham Cnty., 547 U.S. 189, 193 (2006) (asserting that “only
States and arms of the State possess immunity from suits authorized by federal law”). It is important
to note that the courts appear to employ different tests to determine whether a particular governmental entity is an “arm of the state” and thus able to benefit from the state’s Eleventh Amendment
immunity from suit. See also Héctor G. Bladuell, Note, Twins or Triplets?: Protecting the Eleventh
Amendment Through a Three-Prong Arm-of-the-State Test, 105 MICH. L. REV. 837 (2007) (surveying case law and proposing a unified arm-of-the-state test).
175. See supra notes 49–51 and accompanying text.
176. Indeed, “fiction and illogic” pervade Eleventh Amendment immunity. Camille Gearhart,
Note, Confronting the Fictions of the Eleventh Amendment: Pennhurst State School and Hospital v.
Halderman, 104 S. Ct. 900 (1984), 60 WASH. L. REV. 407, 407 (1985); see Idaho v. Coeur d’Alene
Tribe, 521 U.S. 261, 269 (1997) (describing the principle of Ex Parte Young as “rest[ing] on a fictional distinction”). Thus, there is no reason why an artificial distinction cannot exist in determining
when the antitrust state action doctrine acts as an immunity.
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2. Separability
Actions against governmental entities that must satisfy Midcal’s
first prong—the clear articulation requirement—also do not satisfy the
collateral order doctrine’s separability condition. The analysis necessary
to determine whether a governmental entity satisfies the “clear articulation” prong of the Midcal test is sometimes significantly enmeshed with
the ultimate merits determination of whether anticompetitive conduct
occurred. Governmental entities that must meet the clear articulation requirement must answer more than the relatively simple question of
whether the action is that of a state acting as a sovereign.177 Specifically,
determining whether a governmental entity satisfies the clear articulation
requirement involves an inquiry not separable from the merits of the antitrust action.178 In determining whether the clear articulation requirement
is met, a court must examine state law and establish that the state has a
clearly articulated policy to displace competition. This inquiry is inherently intertwined with the underlying cause of action, which requires a
determination of whether anticompetitive conduct occurred. As a result,
actions against governmental entities that must satisfy Midcal’s clear
articulation prong are not completely separate from the merits of the underlying antitrust action.
B. Private Parties
The division among federal appellate courts179 over the immediate
appealability of orders denying a motion to dismiss an antitrust claim
under the state action doctrine is not as broad when private entities are
the defendants.180 Private parties cannot satisfy the unreviewability prong
of the collateral order doctrine because the state action doctrine does not
operate as an immunity when the defendant is not a governmental entity
that is part of the state.181 Moreover, the same concerns about respecting
a state’s dignitary interests are not present when the defendant is a private entity. Because private parties are not governmental entities deemed
177. See Hoover v. Ronwin, 466 U.S. 558, 569, 574 (1984) (stating “[w]hen the conduct is that
of the sovereign itself . . . the danger of unauthorized restraint of trade does not arise” and “[t]he
only requirement is that the action be that of ‘the State acting as a sovereign’”).
178. S.C. State Bd. of Dentistry v. FTC, 455 F.3d 436, 442–43 (4th Cir. 2006)
179. See supra text accompanying notes 15–21.
180. See Auraria Student Hous. at the Regency, LLC v. Campus Vill. Apartments, LLC, 703
F.3d 1147, 1151 (10th Cir. 2013) (explaining that the circuit split on the question of whether denial
of Parker immunity is immediately appealable by private parties “is much less pronounced” than the
circuit split on the question of whether denial of Parker immunity is immediately appealable by
governmental defendants).
181. See supra Part IV.A.1.
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part of the state and must satisfy both prongs of Midcal,182 there is no
fear of impinging on a state’s dignitary interests. With the exception of
rulings adverse to criminal defendants on double jeopardy issues,183 the
Court has only found orders denying immunity to governmental defendants to be immediately appealable under the collateral order doctrine.184
According to the Court, orders denying defenses may be effectively
reviewed on appeal from a final judgment because, even after a trial on
the merits, the appellate court can reverse the earlier denial and order the
case dismissed.185 Private parties, therefore, cannot satisfy the
unreveiwability prong of the collateral order doctrine because the state
action doctrine does not operate as an immunity when the defendant is
not a governmental entity. In addition, private parties must satisfy both
prongs of Midcal, which makes the state action determination not completely separate from the antitrust merits.186
V. PARKER IMMUNITY AND THE COLLATERAL ORDER DOCTRINE IN
APPEALS FROM FTC ADMINISTRATIVE PROCEEDINGS
Adjudicative procedures for FTC administrative litigation are governed by the Federal Trade Commission Act187 and by the Administrative
Procedure Act.188 Analogous to the final judgment rule for appellate review of district court decisions, only “final” agency actions are subject to
judicial review.189 In other words, nonfinal agency action is generally
unreviewable by federal courts. However, the federal courts of appeals
have held that nonfinal agency action that meets the requirements of the
collateral order doctrine is subject to judicial review.190 As the “nation’s
182. See supra Part I.
183. Abney v. United States, 431 U.S. 651, 660 (1977).
184. Osborn v. Haley, 549 U.S. 225, 237–40 (2007); P.R. Aqueduct & Sewer Auth. v. Metcalf
& Eddy, Inc., 506 U.S. 139, 144–45 (1993); Mitchell v. Forsyth, 472 U.S. 511, 530 (1985); Nixon v.
Fitzgerald, 457 U.S. 731, 742 (1982).
185. See supra notes 93–94 and accompanying text.
186. See supra Part IV.A.2.
187. 15 U.S.C. § 45(b) (West, Westlaw through P.L. 114-9).
188. 5 U.S.C. § 554 (West, Westlaw through P.L 114-9).
189. Id. § 704 (West, Westlaw through P.L. 114-9) (“Agency action made reviewable by statute and final agency action for which there is no other adequate remedy in a court are subject to
judicial review. A preliminary, procedural, or intermediate agency action or ruling not directly reviewable is subject to review on the review of the final agency action.”). See generally FTC v.
Standard Oil Co., 449 U.S. 232, 239–40 (1980) (examining when FTC action is final under the Administrative Procedure Act).
190. Rhode Island v. EPA, 378 F.3d 19, 25 (1st Cir. 2004) (asserting that “every circuit to have
considered the question to date has determined (often with little or no analysis) that the collateral
order doctrine applies to judicial review of administrative determinations”); Chehazeh v. Attorney
Gen. of U.S., 666 F.3d 118, 136 (3d Cir. 2012) (noting that “the nine Courts of Appeals that have
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29
premier circuit court for administrative law review”191 put it, the collateral order doctrine “extends beyond the confines of 28 U.S.C. § 1291 to
encompass the principle of administrative finality.”192 Although it has not
squarely addressed the issue, the Supreme Court has suggested that the
collateral order doctrine applies to judicial review of agency action.193
Thus, parties to an administrative adjudication may also invoke the collateral order doctrine when they seek to gain immediate review of agency
decisions in Article III courts.
The FTC’s internal procedures, which govern the way the agency
operates, also do not serve as a barrier to review of nonfinal agency action under the collateral order doctrine. The FTC Rules of Practice state
that adjudicative proceedings shall be conducted expeditiously.194 On the
one hand, this may seem to counsel in favor of prohibiting a procedural
game of ping-pong every time a governmental agency deemed part of the
state seeks to appeal the Commission’s denial of state action immunity to
the relevant federal circuit court of appeals. On the other hand, the FTC’s
policy explicitly notes that proceedings shall be conducted expeditiously
“to the extent practicable and consistent with requirements of law.”195
Case law suggests that the collateral order doctrine applies to judicial
review of agency decisions.196 As a result, the FTC Rules of Practice do
not pose an obstacle to judicial review of nonfinal agency action.
Because agency action can be subject to judicial review under the
collateral order doctrine, the sole issue presented by immediate appeals
from agency denials of state action immunity is whether such appeals fall
within the collateral order doctrine. This Article’s analysis of the immediate appealability of orders denying state action immunity in Article III
addressed [whether the collateral order doctrine applies to judicial review of agency decisions] have
all concluded that it does”); Carolina Power & Light Co. v. U.S. Dep’t of Labor, 43 F.3d 912, 916
(4th Cir. 1995) (“It is well-settled that [the Cohen] requirements of the collateral order doctrine
apply not only to judicial decisions, but also to appeals from executive agency action.”).
191. Timothy H. Gray, Note, Manual Override? Accardi, Skidmore, and the Legal Effect of the
Social Security Administration’s HALLEX Manual, 114 COLUM. L. REV. 949, 962–63 (2014).
192. Meredith v. Fed. Mine Safety and Health Review Comm’n, 177 F.3d 1042, 1051 (D.C.
Cir. 1999) (permitting judicial review of administrative decision that had denied immunity from suit
claimed by employees of the Mine Safety and Health Administration).
193. See FTC v. Standard Oil Co., 449 U.S. 232, 246–47 (1980) (applying collateral order
doctrine’s elements to a nonfinal FTC decision). The Supreme Court has further concluded that, “at
least in the absence of an appealable collateral order, the federal courts may exercise jurisdiction
only over a final order of the Department [of Education].” Bell v. New Jersey, 461 U.S. 773, 778
(1983) (emphasis added) (internal citations omitted).
194. 16 C.F.R. § 3.1 (2015).
195. Id.
196. See supra notes 189–192 and accompanying text.
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courts197 is, therefore, equally applicable when parties appeal from an
FTC proceeding. Thus, governmental defendants deemed part of the state
should have the right of an immediate appeal from an FTC decision
denying state action immunity. In contrast, governmental defendants not
deemed part of the state and private parties should not be able to gain
immediate review under the collateral order doctrine of an FTC decision
denying state action immunity.
The state action doctrine is frequently raised in FTC adjudicative
proceedings.198 One notable case stemming from an FTC adjudication is
South Carolina State Board of Dentistry v. FTC.199 In that case, the FTC
alleged in an administrative complaint that the South Carolina State
Board of Dentistry restrained competition in violation of Section 5 of the
FTC Act.200 The State Board of Dentistry then moved to dismiss the
complaint on state action grounds;201 however, the Commission denied
the State Board of Dentistry’s motion to dismiss.202 The Commission’s
decision was not a final order because the matter had not yet proceeded
to an administrative trial on the merits (often referred to as an evidentiary
hearing) before an administrative law judge.203 The State Board of Dentistry immediately challenged the Commission’s order denying its motion to dismiss on state action grounds by seeking judicial review in the
U.S. Court of Appeals for the Fourth Circuit.204 The Fourth Circuit ruled
that orders denying Parker immunity were not immediately appealable
because such orders fail to satisfy the unreviewability and separability
prongs of the collateral order doctrine.205
197. See supra Parts III–IV.
198. E.g., Ky. Household Goods Carriers Ass’n, Inc., 139 F.T.C. 404, 405 (2005); N.H. Motor
Transp. Ass’n, 136 F.T.C. 869, 884 (2003); Ala. Trucking Ass’n, 136 F.T.C. 886, 903 (2003); Minn.
Transp. Servs. Ass’n, 136 F.T.C. 719, 734 (2003).
199. S.C. State Bd. of Dentistry v. FTC, 455 F.3d 438, 438–39 (4th Cir. 2006).
200. See Complaint, In re S.C. State Bd. of Dentistry, 138 F.T.C. 229 (Sept. 15, 2003) (No.
9311).
201. See Memorandum in Support of Motion to Dismiss, In re S.C. State Bd. of Dentistry, 138
F.T.C. 229 (Oct. 21, 2003) (No. 9311).
202. In re S.C. State Bd. of Dentistry, 138 F.T.C. 229, 266 (2004). The State Board of Dentistry also moved to dismiss the complaint on mootness grounds, but the Commission determined that
it could not resolve the mootness issue without additional discovery and referred the case to an FTC
administrative law judge for limited discovery on that issue. Id.
203. Pursuant to the FTC Rules of Practice, motions to dismiss filed before an evidentiary
hearing are referred directly to the Commission and are ruled on by the Commission unless the
Commission in its discretion refers the motion to the administrative law judge. 16 C.F.R.
§ 3.24(a)(1)–(2) (2015).
204. Brief for Petitioner at 1–2, S.C. State Bd. of Dentistry v. FTC, 455 F.3d 436 (4th Cir.
2006) (No. 04-2006), 2005 WL 3775766, at *1.
205. S.C. State Bd. of Dentistry, 455 F.3d at 441. Interestingly, the court did not address the
threshold question of whether the collateral order doctrine even applies to judicial review of agency
2015]
State Action on Appeal: Parker Immunity
31
The state action doctrine was also raised by a different state dental
board in a case originating from an unrelated FTC adjudicative proceeding. In North Carolina State Board of Dental Examiners v. FTC,206 the
FTC had issued an administrative complaint claiming the Board of Dental Examiners violated Section 5 of the FTC Act. Subsequently, the
Board of Dental Examiners moved to dismiss the administrative complaint before an evidentiary hearing had taken place on the ground that
its conduct was exempted by the state action doctrine.207 However, the
Commission denied the Board of Dental Examiners’ motion to dismiss.
In contrast to the South Carolina State Board of Dentistry, the North
Carolina State Board of Dental Examiners did not immediately seek judicial review of the Commission’s order denying its motion to dismiss on
state action grounds.208 Instead, the North Carolina State Board of Dental
Examiners waited until after the Commission affirmed the administrative
law judge’s finding that the Board violated the FTC Act to appeal the
denial of state action immunity to the Fourth Circuit.209 The North Carolina State Board of Dental Examiners likely did not immediately appeal
the Commission’s denial of state action immunity on tactical grounds
because the Fourth Circuit had already held in South Carolina State
Board of Dentistry that denials of Parker immunity were not immediately appealable. Although the Fourth Circuit has found an FTC denial of
state action immunity to not be immediately appealable as a collateral
order,210 it will be interesting to see how a circuit that has not encountered this issue will rule.
CONCLUSION
The state action doctrine is an important area of antitrust law. Not
only is the doctrine conceptually interesting because it implicates federalism and state sovereignty issues, but it also has great practical impact.
A fairly significant number of antitrust disputes involve Parker immuni-
action. However, a concurring opinion noted that it was assumed that the collateral order analysis
applied to the FTC’s decision. Id. at 448 (Traxler, J., concurring) (citing FTC v. Standard Oil Co.,
449 U.S. 232, 246 (1980)).
206. N.C. State Bd. of Dental Exam’rs v. FTC, 135 S. Ct. 1101 (2015).
207. See In re N.C. State Bd. of Dental Exam’rs, 151 F.T.C. 607, 609 (2011).
208. Id.; Brief for Petitioner at 1–3, 24–25, N.C. State Bd. of Dental Exam’rs v. FTC, 135 S.
Ct. 1101 (2015).
209. In re N.C. State Bd. of Dental Exam’rs, 151 F.T.C. 607 (2011); Brief for Petitioner at 1–3,
24–25, N.C. State Bd. of Dental Exam’rs v. FTC, 135 S. Ct. 1101 (2015).
210. S.C. State Bd. of Dentistry, 455 F.3d at 439.
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Seattle University Law Review
[Vol. 39:1
ty questions.211 One of the areas of confusion over the scope of the state
action doctrine is whether an order denying a motion to dismiss an antitrust claim under the state action doctrine is immediately appealable as a
collateral order. The profound circuit split on this complex question
demonstrates the significance of this issue in antitrust appellate practice.
Because the state action doctrine’s parentage derives from the same
principles of federalism and state sovereignty as the Eleventh Amendment,212 the best understanding of the doctrine is as an immunity when
applied to governmental defendants that are considered part the of the
state itself. On the other hand, the state action doctrine does not function
as an immunity when defendants must satisfy the Midcal framework
(i.e., government entities that are not considered part of the state and private parties). Finally, allowing the immediate appeal of orders denying
Parker immunity to governmental entities that are part of the state will
not undermine the final judgment rule’s goal of ensuring efficient judicial administration.
The state action doctrine is essentially “an attempt to resolve the
tension between federalism concepts favoring states’ rights and national
policies favoring competition.”213 This Article’s conclusion—that some
governmental defendants should have the right of an immediate appeal
while denying an immediate appeal to other governmental defendants
and private parties—is in accord with the state action doctrine’s delicate
balancing act.
211. See STATE ACTION PRACTICE MANUAL, supra note 7, at 83 (asserting that the state action
doctrine is most commonly encountered in certain industries, including health care, transportation,
and energy and utilities).
212. See supra Part III.A.1.
213. STATE ACTION PRACTICE MANUAL, supra note 7, at 44; see N.C. State Bd. of Dental
Exam’rs, 135 S. Ct. at 1117 (asserting that the “Sherman Act protects competition while also respecting federalism”).